How does Lumentum make money?
Lumentum sells lasers as hardware, mostly into AI data center networks. Where its revenue comes from, why its margins swing, who its customers are and what to watch.
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NVIDIA’s customers just got the memory bill
Bloomberg says builders of NVIDIA systems are preparing price increases of more than 15% in many cases as memory costs rise. That is the Micron thesis in one sentence. Disclosure: I currently hold a long position in MU and in NVDA. This piece first went out on Sector Playbook. If you want the next one…
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Is Waymo profitable in 2026?
Updated August 2026. This page started as a March 2025 revenue forecast. The question people are actually typing is whether Waymo is profitable. That is the question this version answers. Waymo is not a profitable standalone company in 2026. Alphabet does not publish a Waymo income statement. The closest public line is Other Bets, the…
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Everyone Is Asking the Wrong Question About Hyperscalers and the Iran War
The energy cost story is a red herring. The real risk is sitting in a data center in Bahrain. There is a question bouncing around finance Twitter right now that goes roughly like this: “Oil is at $110. Natural gas is spiking. Doesn’t this crush hyperscaler margins?” It’s a reasonable question. It’s also the wrong…
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Sector Overview: S&P 500 Systems Software
Section 1: Introduction and Industry Definition The Systems Software sub-industry represents the foundational infrastructure layer of the global digital economy. Within the Global Industry Classification Standard (GICS) framework, this sector is distinct from Application Software; whereas application vendors provide tools for end-user productivity (e.g., creating a spreadsheet or managing a sales pipeline), Systems Software companies…
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Python Risk Management Series (Part 2): Renting Stocks and Hallucinating Arbitrage
In Part 1, we talked about how to stop paying for insurance. In Part 2, we are going to talk about how to stop paying for stocks. The trouble with buying stocks is that they are capital inefficient. If you want to buy 100 shares of Dell, you have to find roughly $13,500. If you…
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Python Risk Management Series (Part 1): The “Zero-Cost” Hedge
The basic premise of owning stocks is that you want them to go up. This is a good premise. It has worked, historically, quite well. But sometimes stocks go down, and this is generally considered “bad.” If you are a rational economic actor, you might look at your portfolio of tech stocks and think, “I…
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Digital Infrastructure
Section 1: Letter to the Financial Investor The Physicality of the Cloud For decades, the definition of “Real Assets” was immutable: toll roads, pipelines, and power grids. These assets were prized for their monopolistic positioning, high barriers to entry, and inflation-linked cash flows. Today, we argue that a new asset class has not only joined…
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The AI Bubble, The Big Short, and The Accounting Mistake: Why Burry Got Depreciation Wrong
Michael Burry is back in the headlines. It looks like he is reloading the “Big Short” cannon—this time aiming at the AI sector. We’re talking about a reported $1.1 billion notional short against NVIDIA and Palantir. (However, there were recent reports stating that Burry has already exited this trade.) His thesis isn’t about the technology failing. It’s…
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Article 2: The Bull Put Spread Delta Cap – Managing SPY/SPX Vertical Spreads
The bull put spread is a staple income strategy: short a lower-delta put, buy a farther OTM put, collect net credit, profit from time decay and upward drift. Yet this seemingly conservative structure harbors a hidden breakpoint. As the underlying declines, the short put’s delta accelerates non-linearly. When it reaches 0.40 delta, the position’s gamma…
